CEA Nageswaran: 'Free' is the most expensive word in public policy
UPSC / SSC current affairs note · Economy
Why in news
Chief Economic Adviser Anantha Nageswaran made a significant statement at the Tamil Nadu Infrastructure Summit, warning that infrastructure projects based on free or below-cost services cannot attract patient capital. His remarks highlight a core fiscal and policy challenge for India's infrastructure development.
Background
The statement was made at the Tamil Nadu Infrastructure Summit organized by CII. Nageswaran emphasized that durable returns require pricing that covers economic costs and a public willing to pay fair charges.
Key facts
CEA Anantha Nageswaran said 'free is the most expensive word in public policy'.
He identified three conditions for infrastructure to attract patient capital: quality infrastructure, contract certainty, and policy certainty.
A fourth condition is durable returns, which depend on a price covering economic cost and a public willing to pay fair charges.
Infrastructure built on free or below-cost services cannot support patient capital.
He argued that someone always pays: either the user pays a fair charge, the taxpayer pays a hidden one, or the asset decays due to lack of maintenance.
The remarks were made at the Tamil Nadu Infrastructure Summit organized by CII.
Prelims pointers
- Chief Economic Adviser (CEA): Anantha Nageswaran
- Tamil Nadu Infrastructure Summit
- Organized by CII (Confederation of Indian Industry)
- Patient capital: long-term investment
- Economic cost of service
Mains angles
- GS3: Infrastructure development and financing challenges
- GS3: Fiscal policy and public expenditure management
- GS3: Pricing of public services and economic sustainability
- GS2: Government policies and interventions for infrastructure